Money Problems

Some casinos are very poorly run. It’s no coincidence that I play in a lot of these casinos. It’s also not a coincidence that degenerates who angle shoot by “helping” people win for a tip also play in a lot of these places.

I’m usually the biggest action in these types of places, so I encounter these people on a fairly regular basis. They like to watch others gamble because if these gamblers win big, they may be able to hustle a tip from them. They are sick gamblers and are just looking for money to get their gambling fix because they already lost.

It’s sad that these people even exist, but they do. If you play professionally, or for high stakes in general, you’ll encounter these degenerate gamblers. I call them “degens” for short. Degens are not to be confused with the attractive female toke hustlers found in more upscale casinos in Las Vegas, which are a whole other topic that I’ll cover another time. For now, I’m talking solely about people who are casino regulars who have lost all their money and are desperate to play. They have probably been tipped many times before by other gamblers. They are desperate, and they are addicted.

I believe the degen situation is much more of a pain to deal with on any type of machine game, as opposed to table games. This is because you’re not playing with other players, or a pit crew, or a dealer. You may not want anyone in the casino to know how much you’re up, what you’re betting, or what you’re doing, so the presence of degens playing the role of your friend in order to extract tips is a problem. Immediately stopping any back-and-forth with these types is key in all situations, but it is especially so in solo situations.

Let’s say you’re jamming away on Kitty Glitter for a slot promo because it’s a great play that day and you like cats. The machine has a lot of credits on it, and this has attracted the attention of the degen.

Typical scenario:

Degen: “hey there, mind if I watch?”

You: “Yes, I do. I’m losing my ass here and I need to concentrate. I can’t seem to line up the three calicos. Please don’t bother me.”

Don’t even look at them and try to sound as irritated as possible. This may or may not work to get rid of this person but it’s far better than the worst thing you can do, which is to engage them. A firm but non-aggressive “no” is mandatory. A follow-up explanation may not be necessary, but it usually won’t hurt.

Why not just tell this person to go beg somewhere else and leave you F alone? That may also work, but when I’m in a casino I want to go undetected. I don’t want any attention, I don’t want a scene. These degens are sick, desperate, and unstable individuals with nothing to lose. They likely gambled all of their money away and are desperate for a few more bucks to play their favorite game. There’s no telling what they might do if you get overly confrontational with them.

If a firm “no” and subsequent cold shoulder doesn’t work, I suggest cashing out and going to a different part of the casino. Or, if you need to play a particular machine or bank of machines, take a break for a bit and come back, and they will have likely moved on. If leaving is not an option, reiterate that you don’t want to be bothered. Blaming losses on the degen is another option (“You’re really unlucky—I’ve been losing ever since you came around. Please leave.”).

On table games, the same rules apply. Don’t engage degens, don’t allow them to sit in an empty seat next to you, and if asked about observing, say something like, “no, I don’t like being watched, and I need to focus—please don’t interrupt me.” If that doesn’t work, even a poorly-run casino’s pit boss will likely intervene if someone not playing is harassing the big action on the floor. Feel free to ask a pit boss to put a stop to it.

Casinos are interesting places. They’re where I make my living, but they’re also where a lot of seedy people hang out and/or make a living. Unwanted interactions with these types is a bit of an occupational hazard. Having a plan to deal with these interactions is key to not letting someone ruin your play or cost you money due to their own gambling addiction.

The following is a guest contribution by Jack Sparrow, a long-time professional advantage player and friend of AP Street.

First, let’s start with a disclaimer. I am not a tax attorney and this blog should not be construed as professional guidance. I’m just an AP with an eye on the future and I want to share what I’ve found with some fellow APs who may not have thought that far ahead yet.

The intended audience for this post are APs who have gone pro in the eyes of the IRS. That is, you file as a professional gambler with a Schedule C or using an S-corp setup. I’m sure many blogs could be written about the pros and cons of filing as a professional gambler, but for now I’m assuming you file as such and I’m going to focus on one of the stronger benefits: tax-deferred retirement savings.

Advantage play is, by nature, a cash-heavy business. When you combine the desire to build a bigger bankroll with the hassle of dealing with banks and their cash paranoia, many APs end up not putting money “into the system.” Speaking delicately, some APs may be inclined to under-report income they keep in cash. While avoiding paying a silent partner who freerolls your earnings is tempting, with inflation ever creeping up on you, storing your wealth in straight cash is just not a smart approach. Additionally, an AP career has an uncertain longevity. Even if you never run out of plays, you’ll reach a point where you can no longer subject yourself to the AP life.

Fortunately for the self-employed professional AP, there is a big benefit you can take advantage of in the form of higher contribution limits for Individual Retirement Accounts (IRA). As you probably know, the IRS allows you to contribute $5,500 per year to a qualified traditional IRA. However, if you are self-employed you can contribute both the employee and employer share. Your contributions lower your taxable income and the investments grow, tax-deferred, and can be withdrawn starting when you are 59.5 years old. At that time, the withdrawals are taxed at the prevailing rate, but assuming your income is fixed and your expenses are more constant, you should be able to position yourself in control of your tax structure.

There are two main types of IRA’s for the self-employed. The SEP-IRA (Simplified Employee Pension) and the solo 401k. The SEP-IRA, as the name implies is the more simple to setup and administer of the two. The Solo 401k is, as it sounds, a 401k plan that exists for your sole proprietor business. The Solo 401k (sometimes referred to as an i401k) requires a bit more paperwork but it is nothing that any competent AP couldn’t handle. The main difference between the two is how much you can contribute per year. I’ll be using the 2017 tax year numbers here.

Both options limit your contributions based on total net profit. The SEP-IRA, belying its name, uses a complex calculation to reach that. In the end, the SEP-IRA works out to 18.6% of the business net profits if you are Schedule C and about 25% if you are an S-corp. Meanwhile, the Solo 401k allows you to contribute a salary deferral of up to $18k per year on top of those percentages.

Now, if you make more than $290k per year, then it doesn’t matter which one you have; you’ll be capped at $54k in total contributions. If you make less than that the Solo 401k will always afford you the ability to contribute more than the SEP-IRA. Let’s use the example of a single Schedule C filer who has a net profit of $100k per year as an AP.

Maximum Contribution:

No IRA : $0

SEP-IRA : $18,587.05

Solo 401k : $36,587.05

Estimated Tax Liability:

No IRA : -$17,126

SEP-IRA : -$12,479

Solo 401k : -$7,979

If you can afford to contribute the maximum amount, do so. You grow your retirement nest egg while at the same time paying less to Uncle Sam. Furthermore, if you’re married and your partner contributes materially to the business (e.g., they do your accounting for you or book your flights) then congratulations, your contribution limits have doubled!

In our example above, if the AP was married and made a net profit of $100k per year, they could contribute up to $54,587 a year ($18k salary deferral * 2 and the $18,587 employer contribution) and have an estimated tax liability of -$2,759. Of course, there are other complexities to making $100k per year in a volatile gambling business and then socking over half of that away for possibly decades. However, there are many who will see through the details of the numbers to the general benefit of getting money now into the system, tax-deferred, for use at a later date.

So there you have it. We’ve established that a self-employed AP can lower his tax burden while effectively preparing for a life after the casinos. We didn’t scratch the surface of how to establish a SEP-IRA or Solo 401k though. Also, for the rare AP who files as a professional but still works a “day job” your contributions to an employer’s retirement plan also count against your $54k annual limit. Additionally, there are other investment options that are available when you’re not tied to an employer’s retirement plan. Perhaps those topics can be approached in a future post, but in the meantime please use Google to answer many of your questions or ask them in the comments section below.

While traveling within the U.S., no cash declaration is necessary, so no matter what amount of money you have on you, there’s no need to inform anyone. Of course, when traveling internationally this is not the case, so it’s absolutely crucial for traveling APs to make sure they understand the policies regarding currency declaration.

Different countries have different laws regarding what to do when entering and leaving their country with cash, but most require a currency declaration when you have over a certain amount. While the specifics of each country’s policy can get a bit sticky, the general rule is that amounts exceeding a value comparable to $10,000 USD (e.g., €10,000 in the E.U.; ¥1,000,000 in Japan) must be declared when entering or leaving the country.

Note that this also applies to mixed currency. If you have $6000 and €5000 on you, that requires a declaration, even though you have less than 10,000 units of each individual currency.

For now, I’m going to focus on currency declarations leaving and entering the U.S., but the information is similarly applicable to trips originating from and going to other countries. If you’re familiar and comfortable with the U.S. currency declaration process, you’ll have no problem managing elsewhere.

When traveling to and from the U.S. with over $10,000 in cash, you are required to declare the money upon leaving, and also upon returning. You are required to fill out a FinCEN 105 form and turn it in to a customs agent for declaration.

This form is easy to fill out, and you can obtain one beforehand at FinCEN.gov. I strongly suggest doing so, as you’ll sometimes get incomplete or incorrect information from customs agents, and this can be disastrous for someone traveling with a large amount of cash. Be prepared.

I’ve been in situations where I was told I didn’t need to fill out a currency declaration form when leaving—only when returning. All the while, I was standing next to a huge sign that said I must declare currency when leaving or my money would be subject to seizure.

In these instances, I made sure to find someone who knew what was going on, gave them the form I had already prepared, and documented that I submitted it to them by either getting a stamped copy or by snapping a picture of the form after it had been approved.

You may wonder why I would go to the trouble if a customs agents had told me that I didn’t need to declare. The reason is because a problem can arise when you declare upon returning. If it comes up that you didn’t declare upon leaving, you could be put in a very bad situation.

I had one particularly green customs agent grill me about this exact situation, as he either couldn’t operate his computer correctly or someone didn’t file my exit declaration correctly. In either case, I wasn’t at all worried, as I had a copy of the completed FinCEN105 I turned in a week earlier.

Having a currency declaration form already completed when crossing a border by car is also useful. Customs agents will have your car searched and you interrogated if they think anything shady is going on. Having a completed declaration form to hand them before they can ask how much money you’re carrying can have a disarming effect. It shows them that you know the laws and that you’re eager to abide by them.

If you’re traveling with someone who is not immediate family and you each have under $10,000 but over $10,000 collectively, you are not required to declare this. However, if the person you’re traveling with is an immediate family member, you must declare. If you’re traveling with a domestic partner in the same situation, you must also declare.

What’s a domestic partner? The designation is open to interpretation, and rest assured that customs agents will err on the side of caution. If you’re traveling with a boyfriend, girlfriend, fiancée, or someone else who you live with and can plausibly be described as being in a domestic partnership with, then you shouldn’t try anything clever—just declare the money and avoid a major potential headache.

Another potential problem scenario to be aware of involves exiting an airport terminal and re-entering through security without re-declaring your currency.

For example, let’s say you leave Country A and your plane stops for a layover while still in Country A, with the next stop in Country B. Typically, you’ll be routed to customs for Country B, where you complete your declaration form for currency entering the country.

So far, so good, but if you leave the international terminal for Country B and have to re-enter through security, for whatever reason, you must re-declare your currency to Country A!

Since declarations often take place upon entering a country with currency—the purpose for the whole thing is ostensibly to curb money laundering and terrorist funding—it’s very easy to find yourself in a situation where you were not required to declare upon leaving. This doesn’t usually present a problem as long as you stay in the proper airport terminals, but if you leave and try to re-enter, you will have a problem. Be aware of what countries you’ve declared to before crossing any borders or moving between airport terminals.

The bottom line is that understanding and following currency declaration rules while traveling internationally is an absolute must. You may resent being treated like a potential criminal while interacting with customs agents, but having your money confiscated with little recourse is far worse.

To many advantage players, mispays are an important part of their bottom line. Even to a blackjack player employing basic strategy, a single paid hand that should have lost represents a small advantage over the house for a full hour of play.

To an AP who already has an edge over the house, mispays go a long way to make up for occasional playing mistakes, EV overestimation, and a variety of other issues that benefit from the mitigating factor of an extra chip here and there.

The ethics of handling a mispay are simple, in my view. It’s the casino’s job to ensure that their payouts are accurate, not yours. The casino will frequently make mistakes not in your favor, and it’s your responsibility to catch these mistakes. I was recently underpaid $1000 at a cashier cage—who do you think caught the error?

If you hit on a hard 19 and bust, the pit boss isn’t going to come over and let you rethink your decision. If you accidentally fold a paying hand and only realize it after the fact, that money is as good as gone. There’s no hand-wringing required: correct errors favoring the casino, and use your judgment when it comes to mispays in your favor.

Why not simply accept all mispays in your favor? The answer is mostly strategic.

I’ve returned mispays many times in a scenario where I’m playing with a partner who is betting significantly more money than I am. The potential scrutiny and small gain of accepting a mispay on my relatively small wager presents a very poor risk-reward scenario, especially if it means that my table is now under active surveillance, even if it is ostensibly just to prevent further mispays.

I’ve also returned mispays in situations where I’m fairly certain that my table is already under active surveillance. I’ve received very large mispays that had what I considered a very low chance of going unnoticed, during sessions that were almost certainly under active review. Returning these mispays arguably bought me some expensive brownie points; I may have assuaged at least some suspicion as a result.

I’ve also returned mispays for reasons that are not at all strategic. Perhaps I’m less ruthless than most APs, but I’ve played with dealers that are just plain having a rough day, and a mispay or two could get them some real heat away from the table. I’m going to get the money one way or another—sometimes I’ll let a little of it go back just to make a fellow human’s life easier. No apologies.

By the way, if you collect a mispay and a pit boss arrives a few minutes later to ask for it back, it’s usually wise to do so, without complaint. First, this tells you that your table is being watched—the delay in catching it usually indicates that surveillance saw it and made the call—and secondly, you have little leverage in this situation. Just give it back with a smile.

This is all well-worn territory, but there’s another side to the mispay coin that must be considered. There are cases where a dealer has made fairly egregious error, either in your favor or otherwise, that will likely jeopardize the longevity of a particular dealer-specific play.

For example, I once got a little greedy while playing a rookie dealer and accepted two separate mispays on a single hand before pointing out that she hadn’t paid my additional, winning side bet before sweeping my cards. This required pit approval, which resulted in a call to surveillance, which resulted in my side bet getting paid but my other mispays being corrected (for a small net loss over just keeping the original mispay and keeping my mouth shut).

In this case, the rookie dealer was repositioned to a different game after her next break, and my shift abruptly ended. Calling out the error cause me to lose money straight away, but it caused me to lose much more money when the dealer was pulled from her table to prevent further mistakes.

Correct casino errors that hurt you, and when errors are made in your favor, think of the potential outcomes before accepting them. Most of the time, you’ll sweep up your extra chip(s) and move onto the next hand; other times, it may pay to smile, point out the error in your favor, and keep your eyes on the prize.

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Blake Phillips is a professional advantage player and contributing editor to AP Street. Contact him at bp@apstreet.com

Due to the saturation of casinos, rooms are generally fairly cheap in Las Vegas. As an AP, though, they can easily be almost free.

In Vegas, it’s usually not a good idea to stay where you plan on playing, or even to play rated in your real name if you’re hitting tables for any kind of substantial profit. Of course, players may sometimes find it profitable or necessary to stay and play rated at a particular casino. For this post, I’m talking about typical table games APs, whose anonymity is generally worth more than the value of a comped room. This is especially effective in Las Vegas, where competition is high and casinos are everywhere.

The key to staying on the cheap without compromising your identity is to obtain a comped room somewhere you don’t plan on earning much EV and that doesn’t come with a risk of having your real name and face being shared with other casinos. Think smaller, independent casinos where the locals tend to play.

This doesn’t mean you can’t gain any EV; you can easily fly under the radar earning a small amount of EV with a comped room and food as a bonus. Although there are many ways to do this, the safest, in my opinion, is by playing video poker. Unless you hit a jackpot, there’s practically no interaction with casino personnel, and comps are commonly given at a rate much higher than the actual EV loss of your coin-in.

For example, I recently played $10K coin-in on video poker at a 4-star, off-strip casino, for an expected loss of around $75. A month or two later I was sent a mailer good for two free nights, $75 in free play, and two free buffets valued around $40-$80, depending on which day I redeemed them. Since my negative EV on the play was only around $75, this was a positive play.

Although this is a terrible way to try and earn a profit, it sure beats paying the price of a hotel room. With a little bit of play, the room is essentially free, and the two buffets are an added bonus. In addition, many of these mailer offers will repeat for a few months, or even longer if you do a little maintenance play during your stay.

Without naming any specific casinos or chains, I’ll say that, in general, Downtown and off-strip properties are much easier to get comped at. I’ll also add that MGM properties are generally stingy when it comes to “low rollers,” or to people who play their good blackjack or video poker games without any serious coin-in. You’ll need to experiment a little to find the right property for your purposes, but once you do, you’ll be staying for free, without needlessly jeopardizing your identity.

Any time I play a session where I plan to bet an amount that could result in a big swing, I prefer to use a BP playing rated in their real name, or I play in my real name, if possible. It’s much easier to buy in for whatever amount you need to get the job done, cash out when you’re done, and be on your way.

Of course, a lot of times this isn’t possible, leaving the alternatives of playing unrated, or playing under an alias. In both of these situations, you may end up with a pile of chips. What do you do with them?

Cash them?

In this scenario, you give up your name at the cage and do the required paperwork to get your money. This can be a tricky situation, but sometimes it’s the best move.

I once hit a large carnival game jackpot while playing unrated at a little, out of the way dump. They paid me in $500 chips, which had to be brought to the table just for this hand, as they don’t regularly stock them in the trays.

I knew they used databases I’m in, and I knew if they decided to check them for my name they wouldn’t be happy. But, if I cashed now I would still get paid and wouldn’t have to worry about what to do with the chips, so I went right to the cage and cashed them without incident. The downside tis that I almost certainly can’t return there until they forget who I am.

Another situation where It may be best to just cash out is when a play gets made and a casino obviously knows your real name and decides to 86 you. I believe that most of the damage is already done and I would rather not be stuck with a bunch of chips I have to worry about.

Sure, they may get some better pictures, but unless you have an acquaintance that wants the chips, it’s going to be a pain in the ass to deal with them. If I have a big pile of chips and it’s obvious the casino is 86ing me because they realize who I am, I generally just cash them. My name, face, and SSN have plenty of heat already; whatever extra damage they can do was probably already done when they figured out who I was and decided to 86 me.

Don’t cash them?

If the casino doesn’t know who you are but is 86ing you for the play, then the best way to avoid your name getting heat is to just leave immediately. At this point, the casino really wants to know who you are so they can add a name to your file, flyer, or database entry. If you give up ID to anyone, they will definitely make use of the info.

If the casino doesn’t know who you are and you can continue to play there because of this fact, it is best to go on not letting them know who you are as long as they continue to let you play. In this case, it’s best to avoid showing the casino your ID for as long as possible.

You may consider keeping a running chip inventory for use when playing at that casino, cashing it all out when you’re no longer welcome or otherwise done playing there. There are other alternative options in this situation, but I will leave those for you to consider.